OPEC is expected to extend its agreement with Russia and other non-OPEC countries to curb production, even as U.S. shale production and exports continue to grow, according to a CNBC oil survey.
About 80 percent of the oil analysts and traders surveyed by CNBC also agree the market, which had been heavily oversupplied, is showing signs of rebalancing.
Forty-four percent say the rebalancing can continue if U.S. production, blamed for the glut, does not rise much more. Thirteen percent say if the U.S. output continues to grow, the rebalancing will end, as it will lead to oversupply.
The OPEC agreement, struck with Russia a year ago, is seen as a factor helping drive a turnaround in oil prices. Ninety-four percent of the 16 survey participants expect the price for West Texas Intermediate crude to end the year at about where it is now — $50 to $60 per barrel. But more than half, 56 percent, said there’s a chance crude could fall back into the $40s in 2018.
OPEC meets in Vienna on Thursday, and the market has been expecting its deal with Russia and other producers to hold back 1.8 million barrels a day to be extended to the end of the year. Reuters reported Tuesday that sources said the technical committee of OPEC and the non-OPEC members recommended extending the agreement through the end of the year with a review in June.